Most often 15 years fixed: that is how BNP Paribas Real Estate describes the leases signed when food stores are expanded, and it matches our experience of new construction. On sites a retailer regards as strategic, 20 years also occur. The renewal options a tenant usually holds on top are a right, not an obligation, so a property's value rests above all on the fixed term that remains.
Fifteen years suits the bank, the landlord and the retailer
Every party needs the long term. The bank finances construction against a lease signed by a leading retailer (see Part 3 of the series German Prime Retail). For the landlord, the term opens the way to automatic rent indexation. Such indexation is permitted only if the landlord is bound for at least 10 years or the tenant has the right to extend the lease to 10 years (§ 3(1) no. 1 PrKG).
For the whole fixed term the retailer is protected from ordinary termination: neither party can give ordinary notice. The lease ends when the term expires, unless it is terminated early in a case the law provides for or is extended (§ 542(2) BGB). The law sets the upper limit: a lease for more than 30 years can be terminated by either party once 30 years have passed since the property was handed over (§ 544 BGB).
A store format ages faster than the building. According to BNP Paribas Real Estate, the average German supermarket is about 450 m² smaller than retailers' current standards require. An expansion as a rule brings a new lease — usually for 15 years again (Part 3).
Exhibit 1. A lease's value lies in its fixed term — most often 15 years — not in its options
Options extend the lease only if the tenant wants them to
A renewal option is the tenant's unilateral right, so a buyer values the remaining fixed term and treats options only as a possibility (Part 12). The retailer's conduct says more than any option. A retailer that has traded on a site for decades and commits to it again for 15–20 years sends one of the strongest signals of location quality (Part 3). In our example in Part 5, a retailer that had traded on one site near Hanover for twenty years signed a new lease for 20 years instead of the usual 15.
The term is protected only if the lease is in text form
A lease for more than one year that is not concluded in text form is deemed concluded for an indefinite term (§§ 550, 578(1) BGB). It can then be terminated by ordinary notice — no later than the third working day of a quarter, to the end of the following quarter (§ 580a(2) BGB), or roughly six months. A 15-year term is therefore protected only if every amendment — a change in rent, for example — is in text form too (Part 7). With the transition period over since 1 January 2026, text form also suffices for leases concluded before 2025 (Art. 229 § 70 EGBGB).
Implications for investors
1. Pay for the remaining fixed term, not for the options. An option remains the tenant's right, so a valuation counts only the years in which the lease cannot be terminated by ordinary notice.
2. Check that the lease and every amendment are in text form before the deal. Without text form, the 15 years become a lease for an indefinite term, terminable in roughly six months.
3. Look for proof of the location in the retailer's conduct, not in the options. A retailer that commits to a site again for 15–20 years after decades on it sends one of the strongest signals of location quality. Ask the seller how long the retailer has traded there and when it extended the lease.
What to check:
• the remaining fixed term at the date of purchase — separately from the options;
• who holds the options and by when they must be exercised;
• who signed the lease and whether it contains special rights of early termination;
• whether the lease and all amendments are in text form;
• whether the term meets the PrKG condition for the indexation clause.
See also: How does rent indexation work in Germany? · What happens if a supermarket tenant moves out? · How do you carry out due diligence on commercial property before buying?
Sources: BGB §§ 542, 544, 550, 578, 580a; EGBGB Art. 229 § 70; PrKG § 3; BNP Paribas Real Estate, Grocery-Investmentmarkt Deutschland Q4 2025; German Prime Retail series, Parts 3, 5, 7 and 12; Gordon Real Estate Group experience. Legal position as of October 2026.
Photo: Jan-Philipp Thiele / Unsplash
This page is general information and not investment, legal or tax advice.